Citi Investment Research lowered it price target on Citadel Broadcasting (NYSE:CDL), according to the AP. The news service also reports that Moody's Investors Service lowered it rating on PMI Group (NYSE:PMI), cutting from "A3" from "Aa2."

Morgan Stanley downgraded Bank of America (NYSE:BAC) to "underweight" from "equal-weight" according to Briefing.com. The news service also reports that HSBC upgraded BP (NYSE:BP) from "neutral" to "overweight".

Douglas A. McIntyre is an editor at 247wallst.com.

MOST NOTEWORTHY: The Cable and Satellite Pay TV industry and FPIC Insurance were today's noteworthy initiations:

• UBS assumed coverage of The DIRECTV Group Inc (NASDAQ: DTV) and Comcast Corporation (NASDAQ: CMCSA) with Buy ratings and Time Warner Cable Inc (NYSE: TWC), Cablevision Systems Corporation (NYSE: CVC) and DISH Network Corporation (NASDAQ: DISH) with Neutral ratings.
• Suntrust is positive on FPIC Insurance Group Inc's (NASDAQ: FPIC) valuation and book value growth. The firm initiated shares with a Buy rating and $50 target.

OTHER INITIATIONS:

• Morgan Stanley started Citadel Broadcasting Corporation (NYSE: CDL) with an Equal Weight rating.
• UBS initiated Accuray Incorporated (NASDAQ: ARAY) with a Neutral rating and $11.50 target.
• Credit Suisse reinstated Ternium SA (NYSE: TX) with a Buy rating.

Main market news here: Before the bell: Credit concerns send futures lower

In its market debut Tuesday, EMC Corp. (NYSE: EMC) spinoff VMware (NYSE: VMW) gained 76%, climbing from its $29 IPO price to close at $51 even.

France Telecom (NYSE: FTE) shares climbed overseas on rumors that its cellular division, Orange, had won the rights to market Apple (NASDAQ: AAPL)'s iPhone in France. France Telecom declined to comment.

Both Sirius Satellite Radio (NASDAQ: SIRI) and Citadel Broadcasting (NYSE: CDL)'s New York radio station WABC are rumored to be courting dismissed CBS (NYSE: CBS) radio curmudgeon Don Imus, who settled his termination dispute with the broadcaster yesterday.

Citadel Broadcasting Corp. (NYSE: CDL) may be struggling even more than its potential new employee Don Imus.

Shares of the Las Vegas-based company have tanked more than 55% this year because the company is in the radio business which continues to suck wind. Excluding the acquisition of ABC Radio from Walt Disney Co. (NYSE: DIS), the company's revenue fell 2 percent in the second quarter. Net income was a tiny $3.8 million, or 3 cents per share. The acquisition made Citadel the proud owners of New York's WABC, Imus' possible new home.

Imus seems to be a good fit with the rest of WABC's lineup which includes Sean Hanity and Rush Limbaugh, both of whom can be at least as offensive if not more so. The I-Man's legion of fans, many of whom responded to my posts on their hero, will no doubt flock to his new show. He will be hailed as someone who got beaten down by the forces of political correctness and lived. Advertisers will be attracted to the program like moths to a flame.

The question is will this new Imus be much different than the old one. If he's too nice, people won't listen. If he's too much like his old self, people won't think he's learned his lesson and advertisers will be turned off.

Interestingly, Craig Carton who is replacing him at CBS Corp.'s (NYSE: CBS) WFAN is no slouch in the controversy department himself. As the more talkative and funny half of the "Jersey Guys" radio show, Carton grabbed huge ratings and controversy for offending politicians and members of minority groups.

Back in April, I suggested that he would make a good replacement for Imus. Someone emailed Carton the post which he read on the air. I called into the "Jersey Guys" and spoke with him briefly. He promised to send me token of appreciation. I'm still waiting.

And Craig, you're welcome.

MOST NOTEWORTHY: Expedia (EXPE), YRC Worldwide (YRCW), Fiserv (FISV), and select radio stocks were today's noteworthy upgrades:

• JP Morgan upgraded Expedia (NASDAQ: EXPE) to Overweight from Neutral on expectations for U.S. bookings growth and margin stabilization.

• YRC Worldwide (NASDAQ: YRCW) was raised to Neutral from Underperform based on valuation.

• Fiserv (NASDAQ: FISV) was upgraded to Sector Outperformer from Sector Performer at CIBC following the CheckFree (CKFR) acquisition.

• Banc of America upgraded Citadel Broadcasting (NYSE: CDL), Cox Radio (NYSE: CXR) and Entercom Comm (NYSE: ETM) to Neutral from Sell as they believe it is time to cover short positions with the expected Q3 weakness likely priced into shares. They caution that this upgrade is not a buy signal as downside risk remains...

OTHER UPGRADES:

• Wachovia upgraded Cabela's (NYSE: CAB) and KBR Inc (NYSE: KBR) to Outperform from Market Perform.

• Baird raised Lear (NYSE: LEA) To Outperform from Neutral.

• Nokia (NYSE: NOK) was upgraded to Outperform from Neutral at Credit Suisse.

• Pacific Crest upgraded shares of eBay (NASDAQ: EBAY) to Outperform from Sector Perform.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

MOST NOTEWORTHY: US Airways (LCC), Cigna Corp (CI), Gentex Corp (GNTX) and China Life Insurance (LFC) were today's more noteworthy upgrades:

• UBS upgraded US Airways (NYSE: LCC) to Neutral from Reduce based on valuation.

• Cigna Corp (NYSE: CI) was upgraded to Neutral from Sell at Banc of America to reflect the company's market share gains and share buybacks.

• Banc of America also raised Gentex Corp (NASDAQ: GNTX) to Buy from Neutral to reflect increased penetration of the company's new rear-camera display product.

• Deutsche Bank upgraded shares of China Life Insurance (NYSE: LFC) to Hold from Sell on valuation and the continued strong equity markets...

OTHER UPGRADES:

• Morgan Stanley raised DirecTV Group (NYSE: DTV) to Overweight from Equal Weight.

• Citigroup upgraded Sempra Energy (NYSE: SRE) to Buy from Hold.

• Acorda Therapeutics (NASDAQ: ACOR) was upgraded to Buy from Neutral at Banc of America.

• Merrill Lynch raised Citadel Broadcasting Corp's (NYSE: CDL) rating to Buy from Neutral.

• CyberSource Corp (NASDAQ: CYBS) was upgraded to Buy from Accumulate at ThinkEquity.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

Walt Disney Co. (NYSE: DIS) opened at $33.50. So far today the stock has hit a low of $33 and a high of $33.55. As of 12:30, DIS is trading at 33.09, down 0.02 (-0.1%).

After hitting a one year high of 36.79 in May, the stock has dropped sharply over the past three weeks. News yesterday evening confirmed that Disney has completed its sale of its ABC Radio Holdings Inc. unit to Citadel Broadcasting Corp. (NYSE: CDL) for approximately $1.35 billion. Recent technical indicators for DIS have been bearish and steady, while S&P rates the stock as a 5 STARS (out of 5) strong buy.

For a bearish hedged play on this stock, I would consider an October bear-call credit spread above the $37.50 range. DIS has not been above $37.50 since the technology boom and bust and has shown resistance around $36 recently. This trade could be risky if the weaker dollar spurs more international tourists to Disney's theme parks, but even if that happens DIS would have to rise by 13.1% and break through its previous highs before this position would be in trouble.

Brent Archer is an options analyst and writer at Investors Observer. Do you have any deadwood in your portfolio? Check out the 18 Warning Signs That Tell You When To Dump A Stock.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, he neither owns nor controls a position in DIS or CDL.

Today, Clear Channel Communications (NYSE: CCU) reported its Q1 results. Revenues increased from $1.49 billion to $1.61 billion, while net income rose from $96.8 million or $0.19 per share to $102.2 million, or $0.21 per share.

But the stock barely moved. Then again, Clear Channel is in the process of a leveraged buyout and the deal is looking iffy.

Recently, Clear Channel's private equity buyers -- Bain Capital Partners and Thomas H. Lee Partners -- upped their bid from $37.60 to $39. But it may not be enough to satisfy major investors like Fidelity Investments and Highfields Capital Management.

Looking at the five-year stock chart of Clear Channel is depressing. The stock price is off about a third. The largest radio operator can't seem to find growth opportunities, and then there are the threats from Internet radio, Apple (NASDAQ: AAPL) iPods, satellite radios, and other digital alternatives.

So if things are so bleak, why would Bain and Thomas H. Lee want to buy the company? Aren't these folks smart and have a history of posting strong returns?

I think the answer is fairly obvious. These investors see a value play.

To the tune of just $12.5 million, the Federal Communications Commission on Friday wagged a white-gloved finger at four top radio broadcasters -- Clear Channel Communications Inc. (NYSE: CCU), CBS Radio (NYSE: CBS) (not CBS's best week), Entercom Communications Corp. (NYSE: ETM) and Citadel Broadcasting Corp. (NYSE: CDL) -- resolving a two-year payola investigation. "A breakthrough and a milestone" in the war on payola, FCC Commissioner Jonathan Adelstein called the settlement.

The FCC's longstanding regulations don't actually prohibit the pay-for-play system, they merely require its disclosure at the time of broadcast. Said Adelstein, "These rules are based on the basic principle that listeners and viewers are entitled to know who is seeking to persuade them so they can make up their own minds about the content."

Such a principle is hardly "basic," and ignorance of sponsorship gives no pass to indiscriminating radio listeners. Marketing pays our fare at every turn; we've become resigned to the notion that behind every song we hear, every TV image we view, every word we read (including these), a dollar sign usually lies quietly. The trick to Adelstein's basic principle is not in knowing who's paying the piper -- or who the piper's paying, in this case -- but in quieting one's cynicism enough to hear the music.

Although the FCC said current rules prohibit a merger between Sirius Satellite Radio (NASDAQ: SIRI) and XM Satellite Radio Holdings (NASDAQ: XMSR), FCC chairman Kevin Martin said the rules barring a merger could be altered, if requested. "The commission looks at anything that is presented to it (and) all of the commission's rules are open to be changed," Martin said, according to a Reuters report

While many believe a possible merger between the two companies would be difficult, including the Wall Street Journal, Bank of America, Janco Partners and CRT Capital Group, they all stop at the same two obstacles: the FCC's regulations and the potential for a monopoly.

If you consider XM and Sirius to be in the same group of broadcasting radio companies as Cumulus Media (NASDAQ: CMLS), Citadel Broadcasting (NYSE: CDL), Clear Channel Communications (NYSE: CCU), and others, then the potential for a monopoly does not exist.

And what if the FCC changed the rules?